SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: August 5, 1999
(Date of earliest event reported)
UNIVERSAL CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Virginia 1-652 54-0414210
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
1501 North Hamilton Street
Richmond, Virginia 23230
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code:
(804) 359-9311
<PAGE>
Item 5. Other Events.
The press releases issued by the Registrant on August 5, 1999
attached hereto as Exhibit 99.1 and 99.2 are incorporated herein by
reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
No. Description
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99.1 Press Release ANNOUNCING Fiscal Year 1999 and Fourth
Quarter Earnings.*
99.2 Press Release ANNOUNCING Board Actions.*
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*Filed Herewith
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
UNIVERSAL CORPORATION
(Registrant)
Date: August 5, 1999 By: /s/ James M. White, III
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James M. White, III
Vice President, General Counsel
and Secretary
<PAGE>
Exhibit Index
Exhibit
Number Document
- ------ --------
99.1 Press Release ANNOUNCING Fiscal Year 1999 and Fourth
Quarter Earnings.*
99.2 Press Release ANNOUNCING Board Actions.*
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*Filed Herewith
Contact: Release:
KAREN M.L. WHELAN AUGUST 5, 1999
Phone: (804) 359-9311 IMMEDIATELY
Fax: (804) 254-3594
UNIVERSAL CORPORATION POSTS EARNINGS
RICHMOND, VA, August 5, 1999 / PRNEWSWIRE
Henry H. Harrell, Chairman and Chief Executive Officer of Universal
Corporation, announced today that for the fiscal year that ended on June 30,
1999, the company earned $127.3 million or $3.80 per share on a diluted basis.
That amount is in line with the company's projections announced in October 1998.
For the final quarter of the fiscal year, the company earned $ 29.4 million or $
.91 in diluted earnings per share. In fiscal year 1998, Universal reported
earnings of $141 million or $3.99 per share, and for the last quarter of that
year, reported earnings were $38.9 million or $1.10 per share.
The fourth quarter of fiscal year 1998 included an after-tax gain of about
$11 million or $.31 per share on the sale of Universal's minority interest in a
Dutch joint venture in spices. Excluding the gain, earnings for the quarter last
year would have been $27.9 million or $.79 per share, and for the year earnings
would have been $130.4 million or $3.68 per share. Thus, diluted earnings per
share for the year just ended would have increased by 3%, and for the quarter by
15%, if the gain were excluded from the comparable fiscal year 1998 earnings.
Gross revenues for the year decreased by 6.6% to $4 billion, primarily due
to the company's oriental tobacco business being transacted by a minority-held
joint venture in 1999; however somewhat lower tobacco prices and volumes were
also factors. In addition, the fourth quarter overall revenue decline was
disproportionately large due to shipment timing differences.
Results for tobacco operations declined in fiscal year 1999 largely due to
the effects of an oversupply of leaf in the marketplace. Earnings in the United
States were reduced by smaller crops reflecting lower purchase intentions by
cigarette manufacturers. Results for Argentina were significantly lower than the
prior year due in part to quality problems in that crop. Despite smaller crops,
other foreign operations continued to do well, primarily due to improved
operating efficiencies. Dark tobacco results declined as volume decreased for
filler, binder, and wrapper tobaccos. Supply of good quality cigar wrapper was
limited by weather problems in Indonesia and Brazil.
Universal's non-tobacco businesses showed improvement in fiscal year 1999.
The agri-products segment produced results that were comparable to those of last
year based on continued good performance from all divisions. Earnings of the
lumber and building products segment were up significantly, despite severe
weather problems, as the prices of plywood, softwood, and hardwood began to
improve during the year.
-- M O R E --
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As of June 30, 1999, Universal had purchased a total of 3.43 million
shares of its common stock for $113 million pursuant to programs announced in
May 1998 and February 1999. The program authorizations total $200 million.
Outstanding shares at June 30, 1999, were 32.1 million.
Mr. Harrell said, "Although our earnings per share reflect the beneficial
effect of our share repurchases, the oversupply of leaf in many origins and the
consequent crop and margin reductions have interrupted Universal's growth in net
income. We believe that our strategy, with its emphasis on strategic alliances
with our customers as well as `right-sizing' tobacco inventory levels, is
working, and we plan to stay the course. As the company begins fiscal year 2000,
markets continue to be difficult with excess stocks in a number of areas and a
large Brazilian crop. We believe the needed adjustment in world supply and
demand is in sight, and we are confident of our ability to manage our business
through this period of uncertainty."
The company cautions readers that the statements contained herein
regarding expected earnings are forward-looking statements based upon
management's current knowledge and assumptions about future events, including
anticipated levels of demand for the company's products and services, costs
incurred in providing these products and services, and timing of shipments to
customers. Lumber earnings could also be affected by unusual weather conditions
in the Netherlands. Actual results, therefore, could vary from those expected.
For more details on factors that could affect expectations, see the company's
Annual Report on Form 10-K for the year ended June 30, 1998, as filed with the
Securities and Exchange Commission.
Universal Corporation is a diversified company with operations in tobacco,
lumber, and agri-products. Its gross revenues for the fiscal year that ended on
June 30, 1999, were approximately $4 billion. Unless otherwise noted, earnings
per share are presented on a diluted basis. For more information, visit
Universal's web site at www.universalcorp.com.
-- M O R E --
<PAGE>
UNIVERSAL CORPORATION
UNAUDITED STATEMENTS OF INCOME
FOR THE QUARTERS ENDED JUNE 30, 1999 AND 1998
(Dollars in thousands, except per-share amounts)
<TABLE>
<CAPTION>
Three Months
------------
1999 1998
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<S> <C>
Sales and other operating revenues $605,085 $846,195
Costs and expenses
Cost of goods sold 442,469 674,398
Selling, general and administrative 104,313 108,179
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Operating income 58,303 63,618
Equity in pretax earnings of unconsolidated
affiliates 7,045 6,045
Gain on sale of investment 16,718
Interest expense 15,301 17,708
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Income before income taxes and other items
Income taxes 17,737 27,470
Minority interests 2,869 $ 2,349
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Net income $29,441 $38,854
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Earnings per share $.91 $1.10
Diluted earnings per share $.91 $1.10
</TABLE>
See accompanying notes.
-- M O R E --
<PAGE>
UNIVERSAL CORPORATION
UNAUDITED STATEMENTS OF INCOME
FOR THE YEAR ENDED JUNE 30, 1999 AND 1998
(Dollars in thousands, except per-share amounts)
Year
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1999 1998
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Sales and other operating revenues $4,004,903 $4,287,204
Costs and expenses
Cost of goods sold 3,394,419 3,644,100
Selling, general and administrative 355,928 364,710
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Operating income 254,556 278,394
Equity in pretax earnings of unconsolidated
affiliates 14,066 16,901
Gain on sale of investment 16,718
Interest expense 56,837 63,974
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Income before income taxes and other items
Income taxes 75,963 98,659
Minority interests 8,546 8,122
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Net income $127,276 $141,258
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Earnings per share $3.81 $4.01
Diluted earnings per share $3.80 $3.99
See accompanying notes.
-- M O R E --
<PAGE>
NOTES
1.)Certain amounts in prior year statements have been reclassified to conform
to current year's presentation.
2.)In the fourth quarter of fiscal year 1998, the company recorded charges for
normal year-end inventory adjustments totaling approximately $7 million after
taxes. In the fourth quarter of fiscal year 1999, such charges totaled $3.7
million after taxes.
3.)Contingencies: At June 30, 1999, total exposure under guarantees issued for
banking facilities of unconsolidated affiliates and suppliers was
approximately $31 million. Other contingent liabilities approximate $55
million and relate principally to performance bonds, Common Market
guarantees, and accounts receivable sold with recourse. The company's
Brazilian subsidiaries have been notified by the tax authorities of proposed
adjustments to the income tax returns filed in prior years. The total
proposed adjustments, including penalties and interest, approximate $30
million; however, currency fluctuations could affect that amount. The company
believes the Brazilian tax returns filed were in compliance with the
applicable tax code. The numerous proposed adjustments vary in complexity and
amounts. While it is not feasible to predict the precise amount or timing of
each proposed adjustment, the company believes that the ultimate disposition
will not have a material adverse effect on the company's consolidated
financial position or results of operations. At June 30, 1999, the company
had approximately $50 million of loans outstanding to a farmer cooperative in
Argentina. The loans are secured by tobacco and liens on real property,
processing machinery and equipment and other assets of the cooperative.
Although management expects to recover amounts represented by these loans,
ultimate collection is contingent upon the ability of the farmers to produce
competitively priced tobacco suitable for export, the financial condition and
management of the cooperative, and the value of the assets pledged as
security for the loans.
4.)The lower estimated effective tax rate in fiscal year 1999 is due to the mix
of foreign and domestic earnings, realization of tax benefits, and
management's current assessment of pending and contested tax issues.
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EXHIBIT 99.2
Contact: Release:
KAREN M. L. WHELAN IMMEDIATELY
(804)359-9311
UNIVERSAL CORPORATION BOARD ACTIONS
RICHMOND,VA August 5, 1999/PRNEWSWIRE/----
The Board of Directors of Universal Corporation declared a quarterly
dividend of thirty cents ($.30) per share on the common shares of the Company,
payable November 8, 1999, to common shareholders of record at the close of
business on October 11, 1999.
They also fixed the voting record date on September 7, 1999, for the
annual meeting of shareholders to be held on October 26, 1999.
Universal Corporation is a diversified company with operations in
tobacco, lumber, and agri-products. Its gross revenues for the fiscal year that
ended on June 30, 1998, were approximately $4.3 billion. For more information,
visit Universal's web site at www.universalcorp.com.
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